You can cash a savings bond at your bank, through the Treasury Department, or by mail — but the timing and penalties depend on how long you've held it

A savings bond becomes useful when you need to turn it into cash. The path you take depends on which type of bond you own, how long you've held it, and whether you're willing to lose some interest. A bond held for less than five years costs you the last three months of interest when you cash it. A bond held five years or longer pays its full value with no penalty.

The simplest route for most people is their own bank. Walk in with the bond and your ID, and the teller can cash it on the spot if your bank participates in the Treasury's savings bond program — most do. If your bank doesn't, the Treasury Department will cash it by mail, though that takes one to two weeks.

Key Takeaways

  • Cashing a bond within five years costs you the last three months of accrued interest, so holding it longer saves money if you can wait.
  • Your own bank is the fastest option if it participates in the Treasury's savings bond program; most banks do.
  • If your bank won't cash it, the Treasury Department will by mail, but the process takes one to two weeks.
  • Series EE bonds and Series I bonds have different rules about when they stop earning interest, so check your bond's issue date before deciding when to cash.

Cashing at your bank versus the Treasury Department

Call your bank's main branch or visit in person and ask whether they cash U.S. savings bonds. Most national banks and regional banks do, but some credit unions and smaller institutions don't. If they do, bring the physical bond and a government-issued ID. The teller will verify the bond's serial number and current value using the Treasury Department's system, then give you cash or deposit it to your account on the same day.

If your bank declines, contact the Treasury Department directly through TreasuryDirect.gov or call 844-284-2676. You'll mail the bond to the Treasury Retail Securities Site in Parkersburg, West Virginia, along with a form signed and notarized. The Treasury will send you a check within one to two weeks. This route is slower but costs nothing and works for any bond.

The early redemption penalty and when it applies

If you cash a savings bond before it has been held for five years, the Treasury withholds the last three months of interest you earned. This is not a fee — it's a reduction in what the bond pays you. For example, if a bond earned $120 in interest over three years, you would receive the original purchase price plus $90 in interest, not $120.

The five-year clock starts from the bond's issue date, which is printed on the bond itself. If you bought a bond in January 2020 and cash it in January 2025, you've held it exactly five years and pay no penalty. If you cash it in December 2024, you lose three months of interest. Once a bond reaches five years old, you can cash it anytime without losing interest.

Series EE bonds and when they stop earning

Series EE bonds stop earning interest 30 years after the issue date. If you own an EE bond issued in 2000, it stopped earning interest in 2030 and will earn nothing if you cash it now. Check the issue date on your bond. If it's more than 30 years old, cashing it immediately makes sense because holding it longer gains you nothing.

If your EE bond is younger than 30 years, the five-year early redemption rule still applies. You can hold it longer to avoid the penalty, but you're also delaying access to money that could be earning interest elsewhere. The trade-off is yours to make based on whether you need the cash now.

Series I bonds and their different rules

Series I bonds work differently from EE bonds. An I bond earns interest for 30 years, just like an EE bond, but the interest rate changes every six months based on inflation. The early redemption penalty is the same — lose three months of interest if you cash before five years — but the amount of interest you lose changes depending on when you cash it.

I bonds also have a one-year holding requirement: you cannot cash one at all during the first year you own it. If you bought an I bond in March 2024, the earliest you can cash it is March 2025. This rule exists to discourage short-term trading. After one year, the five-year penalty rule applies as normal.

What happens to the money after you cash

If you cash at your bank, you can take the money as cash, deposit it to a checking or savings account, or split it between both. The bank reports the transaction to you on a 1099-OID form at tax time if the bond earned more than $10 in interest. You owe federal income tax on the interest you earned, but not on the original purchase price — that's your own money returned to you.

If you cash through the Treasury by mail, they send a check to the address you provide. Deposit it to your bank as you would any other check. The same tax reporting applies: you'll receive a 1099-OID if interest exceeded $10, and you report that interest as income on your federal tax return.

Lost, stolen, or damaged bonds

If your bond is lost, stolen, or damaged beyond recognition, the Treasury can issue a replacement. Contact the Treasury Department with the bond's serial number if you have it, or as much information as you can provide: the issue date, series type (EE or I), and the amount you paid for it. The process takes several weeks and requires documentation, but the Treasury will eventually send you a new bond or cash it out if you prefer.

If the bond is damaged but still readable, most banks will still cash it. If it's torn, faded, or partially illegible, ask your bank first. If they won't accept it, the Treasury will.

Frequently Asked Questions

Can I cash a savings bond at any bank, or only the bank where I opened an account?

You can cash a savings bond at any bank that participates in the Treasury's program, not just your own bank. You don't need an account there. Bring the bond and ID, and any participating bank will cash it for you.

What if I've lost the physical bond but remember buying it?

Contact the Treasury Department with whatever details you recall: the issue date, series type, and purchase amount. They can search their records and issue a replacement bond or cash it out. The process takes time, but your bond is not gone.

Do I owe taxes when I cash a savings bond?

You owe federal income tax on the interest the bond earned, but not on the original purchase price. If interest exceeded $10, you'll receive a 1099-OID form at tax time. State and local taxes vary by location.

Can I cash a Series I bond during its first year?

No. I bonds have a one-year holding requirement. You cannot cash one until at least one year after the issue date. After that, the standard five-year early redemption penalty applies if you cash before five years.

What's the difference between cashing a bond and letting it mature?

Cashing means you withdraw the money now. Letting it mature means you hold it and let it keep earning interest until you decide to cash it or until it stops earning (at 30 years). You control when to cash; maturity is automatic at 30 years.